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Forcenergy struggling to re-establish operations after bankruptcy Redoubt Shoal remains in limbo because of company’s recent financial difficulties; Osprey platform sits in storage Tracy Wilson PNA Staff Writer
In the wake of its Chapter 11 bankruptcy filing two months ago, Forcenergy Inc. will remain in a holding pattern until a reorganization plan is hammered out.
“Our goal is to get out of Chapter 11 as quickly as possible, in less than a year,” said Gary Carlson, Forcenergy’s vice president for Alaska.
In the meantime, Forcenergy’s Redoubt Shoal Osprey platform project remains on hold, awaiting approval of a budget. The $35 million platform is being stored until preparations can be made to move it from Korea to Cook Inlet.
Carlson said capital projects will require court approval.
“It’s very difficult for us to plan,” he said. “We’re hoping to work on wells, increase our production and reserves in Alaska, but the timing will be dictated by the court.”
Escalating credit woes Forcenergy expanded rapidly in recent years, but took on heavy debt that included $315 million in a credit line and $375 million in notes. Low oil prices took their toll, despite production increases, and the banking group that extended the credit line wanted Forcenergy to trim it by $20 million in May. That put additional pressure on the company, which scrambled to sell properties in the Gulf of Mexico. When no suitable bids materialized, the company’s executives opted to file for bankruptcy.
Forcenergy Inc. reported a net loss of $39.5 million for 1998, exclusive of a non-cash impairment of oil and gas assets, compared with net income of $28 million for 1997, also exclusive of a non-cash impairment of oil and gas assets.
The net loss for the fourth quarter of 1998 was $19.7 million, compared to income of $9.1 million for the 1997 quarter.
Recognized in the fourth quarter of 1998 and 1997 were $275 million and $162.8 million, respectively, in non-cash impairments of oil and gas assets under the full cost accounting rules mandated by the Securities and Exchange Commission. The net losses for the years 1998 and 1997, inclusive of the impairment provisions, were $314.5 million and $134.8 million.
Revenues for 1998 were $273.5 million, compared to $284.2 million in 1997. Revenues for the fourth quarter of 1998 were $62.9 million, compared to $85.5 million in 1997.
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